The Coal ministry has finalised the details for auction of coal blocks and a formula to decide the base price for each block that will soon to be put before the Union Cabinet for approval. The ministry is all set to auction 74 coal blocks – including 42 operational mines – in the first phase of auctions expected by January 2015. Coal block auctions will be conducted separately for the power, steel and cement sectors. Prices of power generated from auctioned coal blocks are likely to be capped to prevent companies from inflating electricity bills and profiteering. The ministry is likely to direct the Central Electricity Regulatory Commission to approve electricity tariffs from each block to prevent a steep rise in price. The ministry is also likely to allow successful bidders to use coal from a block in different power plants run by a group. It is in the process of earmarking coal blocks for government and private companies and will further prune them for auction to power, steel and cement sectors. The ministry has arrived at a formula for determining the floor price for each coal block that will be auctioned to private firms. Government companies that will be allotted blocks on a nomination basis will pay a reserve price for mines.
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